People often assume Blockbuster failed because it did not see Netflix coming. In reality, Blockbuster recognized the threat well enough. The company experimented with online rentals, launched subscription services, and understood consumer be- havior was beginning to shift away from physical stores. The problem was not awareness. The problem was holding on too long to the legacy business model that had made Blockbuster successful in the first place. Are acquisition education and train- ing at risk of making the same mistake?
Blockbuster’s operating model, organizational structure, revenue streams, and identity were deeply tied to the storefront experience. Even as the environment changed, the company continued improving the existing model rather than rethink - ing how customers accessed content. Meanwhile, Netflix was not simply im - proving movie rentals. It was building a fundamentally different way of de - livering and continuously adapting content around user behavior. This matters because disruptive innovation rarely appears dominant in its early stages. Mature systems spend years refining efficiency, scale, reliability, and performance. When judged against these mature systems, disruptive innovation appears less ca-
pable or practical. As a result, organi- zations frequently continue optimiz- ing the existing model because it still produces results and aligns with in- stitutional incentives. S-Curve theory helps explain this dynamic. Mature technologies and systems typically evolve along an S-Curve over time (Figure 1). Organizations nearing the end of a mature technology or system life cy- cle often intensify their improvement efforts even as the underlying envi - ronment begins changing. Existing systems continue producing measur- able success, so institutions naturally focus on improving efficiency, refin - ing delivery, and expanding capabili - ties within the current model. At the same time, tensions begin emerging
Figure 1. Technology and Systems Development of Mature Systems vs. Disruptive Innovations
1. The S-Curve starts with modest and
2. Growth then
3. This point of maximum growth is the point of takeoff
4. After takeoff, mature products and systems typically improve incrementally over time until they approach the upper end of their lifecycle
accelerates rapidly, and the slope arches upwards, until it reaches maximum growth
shallow growth
4
3
Disruptive Innovations
2
5. Disruptive innovations often emerge below the previous S-Curve as a less refined alternative operating on a different developmental path
5
1
Time
Source. Author
JULY – AUGUST 2026 | DEFENSE ACQUISITION MAGAZINE 13
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